Citigroup 2Q Earnings Down 37%; Trading Revenue Declines

Hurt by a big drop in trading revenue, Citigroup reported a 37 percent slide in second-quarter profit to $2.7 billion, or 9 cents a share, compared to $4.28 billion, or 49 cents, a year ago. Results topped Wall Street expectations of 5 cents a share, but a murky outlook pushed shares lower Friday for Citigroup, the No. 3 U.S. bank by assets.

CitiMortgage to Suspend Foreclosures in Oil Spill Area for 3 Months

Citigroup said it will suspend foreclosure sales and notifications on CitiMortgage-owned mortgages from June 17 through Sept. 17 for borrowers in the coastal areas hit hardest by the oil spill in the Gulf of Mexico. Those borrowers will have to meet certain other criteria.

CitiFinancial to Re-Organize, Cut Up to 600 Jobs

Citigroup said its CitiFinancial unit will close 330 branches in the U.S. and expects the re-organization of the consumer finance arm to result in the loss of between 500 and 600 jobs. The move is intended to cut costs and to make the new entity more attractive to potential buyers.

Citigroup’s $200M Fund Eyes Under-Served Small Businesses

Citigroup said it is launching a $200 million fund to generate small business lending in “low wealth and low income” U.S. communities. The Communities at Work Fund is to provide financing to both nonprofit and for-profit Community Development Financial Institutions (CDFIs). The U.S. Treasury designates a lending institution as a CDFI if it has a local, targeted mission of funding community development projects.

Citigroup’s $4.4B Profit is Best in 2 Years; Credit Losses Decline

Citigroup, the last major banking institution to repay its government bailout last year, reported a profit of $4.4 billion, or 15 cents per share, for the first quarter of 2010, soundly beating expectations with its highest net income since early 2007. The third largest U.S. bank, Citigroup’s net credit losses declined $1.6 billion, or 16 percent, from the previous quarter to $8.4 billion.

Lenders: Mortgage Forgiveness Costly, Unfair to Others

Principal forgiveness –a key part of the Obama Administration’s new foreclosure prevention efforts – would prove to be very costly to the industry and taxpayers, and ultimately unfair to the vast majority of homeowners who stay current on their unreduced mortgages, top banking executives said today. The executives from some of the top mortgage lenders – Bank of America, Citigroup, JPMorgan Chase and Wells Fargo – testified before the House Financial Services Committee.

Ex-Citigroup Top Execs Sorry, But Deflect Fault in Crisis

Charles Prince, the former Citigroup CEO and Robert Rubin, its former chairman, testified today they were mostly unaware that the financial institution was sitting on debt obligations riddled with toxic mortgages as a dramatic housing market collapse loomed in 2007. But in prepared testimony both men placed more blame on the financial system that fostered the crisis, than on their own actions.

Ex-Citi Exec Warned Bosses of ‘Defective’ Mortgage Pools

Beginning in 2006, Citigroup’s chief underwriter overseeing $90 billion in loans annually warned the institution’s top bosses that at least 60 percent of mortgages purchased and sold were “defective.” By 2007, as the subprime mortgage bubble would give way to a housing market collapse, Citigroup’s Consumer Lending Group was sitting on pools of subprime mortgages with a defective ratio of 80 percent.

Treasury to Sell Its Citigroup Stake in ‘Orderly’ Plan

The U.S. Treasury will sell all its 7.7 billion common shares in Citigroup throughout 2010 “subject to market conditions” – likely resulting in the largest profit from the government’s bailout program. Treasury said it intends to sells its 27 percent stake in Citigroup “through various means in an orderly and measured fashion.” It will be done so according to a “pre-arranged written trading plan.”

Citigroup to Join 2nd-Lien Foreclosure Help Program

Citigroup is the latest major lender to commit to the government’s Second-Lien Modification Program, 2MP, that helps borrowers reduce payments on second mortgages. JPMorgan Chase, Bank of America and Wells Fargo have already announced their intended participation in the program that works in conjunction with the larger foreclosure prevention effort, Home Affordable Modification Program, HAMP.

Next Page »